Amazon will train Australians to expect far more

By August 3, 2017Uncategorized

The arrival of Amazon will set a new standard for customer experience and whether you work in retail or not, it’s going to affect your business.

Read the full AFR article below. 02.08.2017

Amazon is the master of using customer data to tailor interactions

People in the marketing industry bang on about disruption a lot. Uber disrupted taxis, Airbnb disrupted hotels. But when it comes to Amazon, this is a business that’s going to disrupt everyone. When Amazon comes, you better believe it’s bringing its A game and that A game is vastly better than any Australian company on the internet. In no time at all, consumers will be expecting every business they interact with to deliver online experiences to this new standard.

To get a sense of what’s about to happen, just take the example of Uber. Once upon a time, nobody minded that much when you rang a taxi and it took 15 minutes to turn up if it came at all. You just dealt with it. Now the concept of ringing in the first place is archaic, and not knowing where that thing is – well, that seems just plain madness.

Uber set a new standard of seamless, enhanced delivery. The entire process of ordering a car, seeing it coming and cashless payment is what makes Uber an unbeatable example of somebody that’s come in, disrupted the market and set a new standard of performance.

But take that example and multiply it by 1000 for Amazon. With its arrival, the pie will grow in a number of sectors including retail. But only businesses that can deliver on par to that fast, seamless and intuitive standard will benefit. So how do you do that if you’re not already?

Customer care

First, you need to get good at data and that goes far beyond simply collecting it and managing it. You’ve got to be turning it into actionable insights that put the customer right at the centre of everything you do. Think mass personalisation, something Amazon has nailed with its recommendation engine. As the Boston Consulting Group acknowledges, Amazon is the master of using customer data to tailor interactions and create powerful feedback loops. This is the new-world version of ultimate customer centricity.

You also need to get faster. Granted, that’s going to be limited by the fact that Australia is ranked an ordinary 51st in the world for internet speed. But bear this in mind: figures from data and analytics platform Kissmetrics show 40 per cent of users will abandon a website that takes more than three seconds to load. That’s great for Amazon, which takes all of 2.8 seconds to load but the average Australian retailer clocks in at 10.9 seconds.

The need for speed also applies to delivery of your product or service. According to data from Google, following Amazon’s launch in India in 2013, “near me” and “click and collect” searches grew exponentially. Amazon trained those consumers to expect things to happen in the blink of an eye and now, they’re not even prepared to wait for Amazon to deliver their item in a couple of hours. Many would rather locate it and go pick it up immediately. Is your search strategy equipped for that and are your staff able to offer that kind of service?

Despite what you may have heard elsewhere, there is time to act. The good news for now (and maybe the bad news for later) is that Amazon doesn’t think like most Australian retailers focusing on performance quarter by quarter. They look at things with a longer view, happy to take three or four years to reach their full-tilt boogie offer in Australia. They’ll start with the stuff they can do reasonably easy such as Amazon Prime then roll into things that people are already buying online. It won’t be the full-on Amazon straight away which gives us all a window to act – but it’s closing, fast.

There is reason to be optimistic. This new standard will grow sectors such as online shopping considerably. But the only way Australian businesses will weather the storm and prosper is if they are part of the cohort moving up with the new standard.


 

Craig Flanders is the chief executive of advertising agency Spinach.
AFR Contributor

Click here to view the original article on The Australian Financial Review.